Colorado Springs Utilities CEO Jerry Forte spent nine months and thousands of dollars looking for his new chief energy officer, then hired someone who didn't even apply.
Bruce McCormick, chief water officer, was promoted in October, getting a bump in pay from $232,378 to $245,000. The job came open when Tom Black retired in January.
Forte's decision came after Utilities spent nearly $10,000 in travel expenses to bring in a dozen finalists for interviews between March and September. The finalists came from Houston, Indianapolis, Baltimore, Cleveland, Phoenix, Nashville, Albuquerque, Minneapolis and Long Island.
The decision to choose McCormick also came after Forte authorized spending thousands for a consultant to recruit candidates. Although the process resulted in Forte liking two finalists well enough to offer the job, both turned him down.
This pattern, Forte says, can't continue if Utilities is to remain a top-flight operation. After paying $77,000 to recruit candidates for three high-level jobs in two years, McCormick's included, it's hired from within two of the three times.
"We just can't pay enough money," Forte told the Utilities board (aka City Council) at its Nov. 17 meeting, referring to the finalists who rejected his job offer. "I know what we're doing is not sustainable. I am very concerned. When someone is offering a senior officer more than you offer your CEO ... the industry we're in is extremely competitive."
Forte, promoted from chief operating officer in 2005 to replace Phil Tollefson as CEO, is paid $276,750 a year, which hasn't changed since 2007. He received $31,411 in a performance bonus for 2009 (paid in 2010), and also received $39,852 in incentive pay for 2009, placed into a retirement account.
Besides difficulty in hiring, Forte says his department has lost "senior-level folks" as well as linemen, engineers and others to agencies that pay more. Next year's budget doesn't include a pay increase.
"It's obviously a huge challenge for us," he says, reporting that industry raises exceeded 3 percent this year while Springs Utilities workers haven't had a cost-of-living raise in three years. (There have been some merit raises.)
Councilor and Utilities Board member Randy Purvis says it's a "challenge" to compete with investor-owned utilities when recruiting executives. He thinks Utilities should concentrate on grooming staff for promotions rather than looking outside. Regarding Forte, Purvis says, "I can't see giving him a raise when the rank-and-file haven't gotten raises in this economic environment."
The Independent contacted seven of the 12 chief energy officer finalists. Only David Gillespie, CEO at Aleut Corp. in Houston, who interviewed in March, was willing to talk. He said he had a rigorous discussion with Utilities officials but wasn't offered the position.
Asked if he would have accepted it if it paid $245,000 a year, he said, "Maybe. It's hard to say. But it's only one factor. There's a lot more to the compensation program. What is the bonus? The vacation time? The benefits?"
He might have been disappointed to learn Utilities no longer has a bonus program. Some workers' pay declined; many saw no change or even an overall increase. Forte still gets bonuses, required under his contract.
Forte now needs a chief water officer to replace McCormick. Utilities is advertising in-house with "no current plan" to hire a recruiting consultant, Utilities spokesman Steve Berry says in an e-mail.